MALAYSIA Derivatives Exchange (MDEX) crude palm oil futures prices fell in an early round of selling on Monday, but the move was short-lived as strong technical buying emerged and lifted the market off sharply from its intra-week lows and finally closed the week with minor gains.
Despite the lower exports reports for the first ten days of January from both cargo surveyors Intertek Testing Services (ITS) and Societe Generale de Surveillance (SGS), the market managed to retain its buoyancy, reflecting the generally bullish sentiment of traders who would be concentrating on the China factor in the immediate term.
The benchmark third-month March 2003 futures prices rebounded from a weekly-low of RM1,600 to RM1,675 and closed at the top-end of its weekly-high at RM1,670, up RM42 per tonne from a week ago.
Technically, the March 2003 crude palm oil futures ended the week slightly positive and could maintain its recently developed upward momentum this week. Continuation of the positive move should take the March futures higher to test its immediate chart-resistance at the RM1,690-RM1,680 level. Chart-support for this week is pegged at the RM1,655-RM1,645 level. The short-term chart outlook would turn negative if these levels are violated and force the market to settle for sideways band trading.
The daily technical indicators closed the week mixed and indicated that the recent strength of the market may not develop into a minor uptrend.
The daily stochastics triggered the buy-signal on Jan 6 and ended Friday in the bullish extended-move zones. The oscillator per cent K and D closed the week sharply higher at 94.42% and 78.72% respectively. Analysis of this daily oscillator shows that the upward wave that was formed last week was slightly overdone unless fresh buying support emerges this week, we could get to see a minor downward adjustment.
The 3-day and 7-days exponentially smoothed moving-average price-line (ESA-line) indicated the buy-signal with a crossover on Jan 8 and managed to stay positive during Friday’s close. The 3-day and 7-day ESA-lines closed the week higher at 1,665 and 1,659 points respectively. Analysis of the MAV-lines indicates that the immediate term trend could stay positive.
The daily moving-average convergence/divergence (MACD) retained its negative signal and indicated a strong positive convergence during Friday’s close. The daily MACD settled the week below the trigger-line and closed lower at 17.39 points and 18.55 points respectively. Analysis of the daily MACD shows that the market is not out of its main negative trend.
The daily momentum index (M.I) penetrated the 100-point mark on Jan 8 and closed the week higher at 100.30 points. Analysis of MI indicates that the market’s immediate momentum is positive.
Soyoil futures at the Chicago Board of Trade (CBOT) closed the week slightly higher after having traded in the negative territory for most of the early sessions.
News that China, the main US soybeans buyer has issued a permit to import genetically modified soybeans from the world’s third largest producer Argentina but not from the world’s number two producer Brazil, triggered off hopes that US beans would benefit from such a move.
The March 2003 futures prices hit a weekly-low of 20.70 US cents on Tuesday and rebounded mildly to close Thursday at 21.21 US cents, up 0.02 US cents per lb. from previously.
Chart-wise, the March 2003 soyoil futures prices finished the week slightly positive and appear set for further band trading this week. Chart resistance for this week is adjusted lower from a week ago to the 21.40-21.50 US cents per lb. levels.
Chart outlook for this week could turn positive if these levels are successfully vaulted. Based on the daily chart, the March futures have an immediate support at the 21.10-20.90 US cent level. Breaching of this important support would send the market lower below the 20.70-20.60 US cents per lb. levels.
The daily technical indicators closed the week neutral-to-slightly positive and called for more sideways range trading this week.
The daily stochastics triggered the buy-signal on Jan 7 and managed to stay positive during Thursday’s close. The daily oscillator per cent K settled above the oscillator per cent D and ended higher at 64.63% and 43.32% respectively. Analysis of the daily stochastics indicates that the market could extend on its recent upward momentum this week.
The daily moving-average convergence/divergence (MACD) closed the week bearish and indicated a strong positive convergence to signal that a trend change is about to start. The daily MACD ended above the trigger-line and closed slightly lower at minus 0.17 and 0.15 points respectively.
The 3-day and 7-day exponentially smoothed moving-average price lines continued to indicate that the market main trend is negative and failed to give a cycle-change signal during Thursday’s close. The 3-day and 7-day ESA-lines settled the week lower at 21.21 and 21.25 respectively.
The daily momentum index (MI) ended the week marginally lower in the negative territory at 98.10 points and indicated that the market is still in a negative phase.
Cocoa futures prices on the Coffee, Sugar & Cocoa Exchange (CSCE) in New York fluctuated wildly as the Ivory Coast war continues to dictate the daily trend and closed the week with minor gains. Prices initially surged on news of renewed hostilities when government forces bombed rebels forces positions and killed 15 rebels just a day after both parties declared a ceasefire and a willingness to meet for a peace talk in Paris on Jan 15.
Traders fear continued fighting could hinder the cocoa harvesting, processing and shipment of the commodity from the world’s largest cocoa producer and finally causing a shortfall in supplies in the near-term.
The March 2003 cocoa prices surged to new highs at US$2,200 and pulled back to a low of US$2,078 and finally closed the week near its life-of-contract high at US$2,160, up US$25 per tonne from a week ago.
Chart-wise, the March 2003 cocoa futures prices ended the week slightly positive and are expected to remain in volatile trading this week. An immediate chart-support is seen for this week at the US$2,100-US$2,130 level. Violation of this vital support could result in a heavy wave of long-liquidation and pressure the market sharply lower to test its minor chart-support levels at the US$2,050-US$2,000 per tonne level. Overhead resistance for this week remains at the US$2,200-US$2,180 level.
The daily technical indicators ended the week mixed and signalled that the market may settle for more downward correction this week.
The daily stochastics became bearish when it triggered the sell-signal on Jan 8. The daily oscillator per cent K settled below the oscillator per cent D and closed at 67.66% and 80.41% respectively. Analysis of the daily stochastics shows that the market is top-heavy and could enter into more downward adjustment this week.
The 3-day and 7-day exponentially smoothed average price-line (ESA-line) stayed positive during Thursday’s close and indicated that the immediate term trend is still bullish. The 3-day and 7-day ESA-lines closed the week sharply higher at 2,144 and 2,127 respectively.
The daily moving-average convergence/divergence (MACD) triggered the buy-signal last week and signalled that the market’s main trend is still bullish.
The daily MACD and trigger-line ended higher in the positive zones at 62.64 and 61.24 points respectively. Analysis of MACD shows that the bullish momentum could be sustained this week.
The daily momentum index (MI) closed the week higher in the positive territory at 104.00 points. Based on the daily MI, the market is in a bullish phase and has the potential for further advances.
Tin prices on the Kuala Lumpur Tin Market (KLTM) advanced sharply on aggressive buying influenced by the higher values in the London Metal Exchange last week and closed with strong gains.
The cash tin prices closed the week higher at US$4,400 per tonne, up US$135 per tonne from a week ago. Trades for the week fluctuated widely from US$4,460 to US$4,320 per tonne.
Total volume for the week jumped to 244 tonnes from 154 tonnes a week ago.
Chart-wise, the cash tin prices finished the week bullish and are expected to stay upbeat this week. Chart-support for this week is adjusted sharply higher to the US$4,350-US$4,370 per tonne level.
If the underlying strength of the market is bullish, these levels are not expected to be tested this week. However, breaching of these supports would signal that the recent upward move is overdone and could result in a downward correction this week.
Chart-resistance for this week is pegged at the US$4,450-US$4,480 level.
The weekly technical indicators ended the week bullish and signalled that the upward trend could continue next week.
The weekly stochastics retained its buy-signal of a week ago and closed the week bullish. The weekly oscillator per cent K and D settled higher at 63.46% and 46.11%. Analysis of the weekly stochastics showed that the market has not reached a technically overbought position yet.
The weekly moving-average convergence/divergence (MACD) turned positive last week and called for more upside trading this week. The MACD and the trigger-line settled higher in the positive territory at 0.044 and 0.045 of a point respectively.
The 3-week and 7-week exponentially smoothed average price-lines (ESA-lines) held on to its cycle-change signal on Friday and signalled that the upward wave would continue. The 3-week and 7-week ESA-lines closed the week higher at 4,325 and 4,284 respectively.
The weekly momentum index penetrated the 100-point mark during Friday’s close and settled higher at 100.57 points. Analysis of the weekly MI shows that the market would stay bullish for the near-term.
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